Do foreigners in Japan need to join the Japanese public pension?

Foreigners who live in Japan for a long time have these questions for their retirement lifestyle. I would like to explain about three primary things you must know about the pension system in Japan.

Do foreigners need to join Japanese pension program?

The answer is “Yes”. Pension’s joining obligation is applied to all the residents living in Japan regardless of the nationality. If you are 20 years old or older than 20, or less than 60 years old, even if you are a foreigner without the Japanese nationality, you are obliged to join in the Japanese pension program.

Japanese residents need to join in either one of Kosei-Nenkin = “厚生年金” (employee pension), Kyosai-Nenkin = “共済年金” (mutual pension) or Kokumin-Nenkin = “国民年金” (national pension).

If you are a temporary stayer planning to live in Japan for a couple of months, residence certificate is not issued and you are not regarded as a resident in Japan. However, the authority looks you as a resident in Japan, you are forced to join in the pension program.

There might be some foreigners who don’t want to pay the Japanese pension but the choice of no payment is not accepted for those who live in Japan for a certain period of time.

For those who live in Japan continuously even after retirement, joining in the Japanese pension is advantageous but for those who live in Japan temporarily and plan to go back to their countries before their ages reach the required age of pension eligibility, keeping paying the pension is disadvantageous in spite of making joining in the pension obligatory institutionally. I would explain how you should handle the case in

The public Japanese pension system

If you are aged from 20 to 60, you must join in Kokumin-Nenkin (national pension). If you are an employee of a company, you also need to join in Kosei-Nenkin (employee pension) additionally. Speaking of pension, it is a system the government pays you back a pension with additional benefit by the government’s asset management after you are old enough to receive a pension.

Moreover, just in case you become handicapped, your life support allowance is paid from your pension and if you’re dead, your pension will be paid to your spouse and children.

Therefore, this pension system plays a roll of dead insurance and accident insurance when you face these situations.

3 public Japanese pensions

Kosei-Nenkin = “厚生年金” (employee pension)	Kosei-Nenkin is an employee pension that employees need to join in additionally with Kokumin-Nenkin (national pension). The payment amount of pension fee of both Kokumin-Nenkin and Kousei-Nenkin goes halves between a company and a recipient. Your payment amount will be deducted automatically by the company you work for.
Kokumin-Nenkin = “国民年金” (national pension)	This is also called Kiso-Nenkin “基礎年金” (basic pension). Every single resident aged from 20 to 60 need to join in this pension
Kyosai-Nenkin = “共済年金” (mutual pension)	This is a type of pension that government employees or public servants join in

Do foreigners have pension eligibility?

Yes. All foreigners who pay a pension have eligibility for receiving a pension after the required age of pension eligibility. Concretely, please refer to the following items.

Basic pension

• If a pension payer becomes 65 or older than 65, a pension payer are eligible for receiving a certain amount of pension
• However, an eligible pension recipient needs to pay a pension continuously for over 25 years

Handicapped basic pension

• If a pension payer face as serious accident as becoming handicapped that can be recognized as the disability standard, a pension payer are eligible for receiving a certain amount of pension
• However, a pension payer needs to complete the payment of 70% of required term and have no overdue for 1 year from 14 months before the first visit day to be diagnosed as handicapped.

Survivor’s pension

• If a pension payer is dead, the left survivors have the right to receive the pension
• However, Eligible recipients need to be a spouse and the child aged younger than 18 years old whose living is supported by a pension payer’s earnings.

I plan to go back to my country before my age reaches required aged of pension eligibility. Can my paid pension be refunded?

Foreigners who did resident registration and have residence certificate must pay Kokumin-Nenkin pension unexceptionally as I told.

However, if you plan to go back to your country before you become the age required as pension eligibility, your payment amount is in vain.

Hence, foreigner’s disadvantage is protected by a social security agreement between Japan and other countries, and the Japanese unique system of lump-sum withdrawal and voluntary withdrawal.

The social security agreement is concluded between Japan and other affiliated countries to solve the problems of dual pension payment and pension eligibility.

In some cases, some foreigners who intend to spend their lives after retirement in their countries keep joining in their national pension even while they are in Japan.

In terms of pension eligibility, a pension payer who doesn’t complete 25-year payment term is not eligible for receiving a pension. It really depends on the country but there are a lot of cases that required payment term is regulated as one of the pension eligibilities.

It is obvious that foreigner’s pension, who plans to live in Japan for a couple of years, comes to be in vain because the required payment term cannot be satisfied.

To solve these problems, the following contents are concluded through the agreement.

For example, a foreigner who has lived in the native country for 20 years and plans to live in Japan for 6 years needs only to pay a Japanese pension.

In addition, the pension payment term in Japan is added upon the pension payment term in the native country. This foreigner’s pension payment term is 26 years. Even if the pension payment term in Japan is only 6 years, this foreigner is eligible for receiving a pension in Japan.

The receivable pension amount is only calculated from the payment amount this foreigner make in Japan. The pension payment amount that this foreigner make in the native country is not considered.

Whether the national pension can be received by the native country all depends on the country’s pension system.

The number of the affiliated countries of this social security agreement is about only 20. If you are from the country that doesn’t conclude this agreement, you should make use of “voluntary withdrawal” and “lump-sum withdrawal”

What is voluntary withdrawal?

As I said, receiving Japanese pension, you must pay a pension for 25 years during the pension joining term when you are aged from 20 to 60, during the voluntary pension joining term when you are aged from 60 to 70. Therefore, it is already known that pension eligibility is not given to you if you come to Japan when you are 50 years old. For such foreigners, Japanese compulsory pension system is really cruel.

Those who have pension payment term for only less than 25 years when coming to Japan can make the most of the system of voluntary withdrawal from a Japanese pension program after being approved by the Mister of Health, Labor and Welfare

If you are from the country that concludes the social security agreement, in case your payment terms doesn’t reach 25 years in spite of adding pension payment term in Japan on pension payment term in your country, you can use voluntary withdrawal system.

However, if you are younger than 45 years old, who still leave 25 years of possible pension payment term until 60 years old, you are not given the right to apply for voluntary withdrawal. In this case, you have to apply for the lump-sum withdrawal system I explain down below.

What is lump-sum withdrawal payments

Lump-sum withdrawal is a system to refund a certain amount of pension you’ve already paid after going back to your country. Check the conditions down below

How much you can receive lump-sum withdrawal payments all depends on how much pension you have already paid so far. As one of the standards, 45,000 yen will be refunded to 6-months pension payment term. You just refer to the page of Japan Pension Service here.

In 2015, the pension payment amount for 6 months cost payer about 95,000 yen. Only a half of pension payment amount can be refunded. Even if you make the most of the lump-sum withdrawal system, the other half is in vain. However, unless your country is affiliated with the social security agreement, you cannot help using this system to be refunded even just a little more.

However, there is one thing you should pay attention to when using this system, which is that you are regarded as a not insured pension payer even during the term you paid a pension because of receiving lump-sum payments.

If you are from the country with a social security agreement, your pension payment term in Japan is added on your present pension payment term in your country after going back to your country. However, because of receiving lump-sum withdrawal payments, you are looked as not a pension payer in Japan and your pension payment term in Japan cannot be counted in your total pension payment term.

Moreover, if you come back to Japan again after going back to your country, you need to join the Japanese public pension again. In this case, if you don’t receive lump-sum withdrawal payments, your past pension payment term and amount is considered to be added on the restart of pension payment in Japan.

However, if you accept receiving lump-sum withdrawal payment, you need to start paying a pension from scratch.

Those who are from the country with social security agreement with Japan and those who have the possibility to come back to Japan again in early future need to think deeply which choice is advantageous for them in terms of whether they accept receiving lump-sum withdrawal payments or not.

Things you pay attention to when you come back to Japan with special re-entry permission

Those who go back to your country after receiving special re-entry permission have a thing to pay attention to.

If you go back to your country without receiving special re-entry permission, your visa status of Japan is deprived and your resident restoration will be terminated. But if you go back to the country with special entry permission, your resident registration in Japan cannot be terminated if you go through a necessary procedure.

And having resident registration in Japan means that you need to join in the Japanese pension program so you can’t claim lump-sum withdrawal payments. If you want to claim lump-sum withdrawal payments with special re-entry permission, you need to satisfy the following conditions down below.

If you do nothing, you can’t claim lump-sum withdrawal payments until the expiration date of special re-entry permission. If you really want lump-sum withdrawal payments as soon as possible, you should submit, move-out notification and notification of pension eligibility deprivation.